Indonesia and Hong Kong sign tax treaty

Jakarta (ANTARA News/Asia Pulse) - Indonesia and Hong Kong have signed a new tax agreement to avoid double taxation and prevent tax evasion, an official of the finance ministry said.

Under the agreement signed Tuesday, Indonesia will reduce taxes on Hong Kong investors' income in dividends, royalties, interest on financial products, and profits generated by branches of Hong Kong companies operating in the country.

Syarifuddin Alsah, Indonesia's director of tax regulation, said Hong Kong investors' income tax on dividends and interest will be cut to 10 per cent and the tax on interest on financial products will be slashed to five per cent from 20 per cent at present.

Meanwhile Indonesian companies operating in Hong Kong will no longer be subject to double taxation.